Way too many traders are focusing on the most difficult plays out there and leaving gimmes for no good reason.
Stop focusing on those stocks that are spiking 3%, 5%, or even 10% that have little to no volume…
It’s no wonder why so many traders get frustrated early on in their trading career and call it quits.
Trading is all about being meticulous with your trades…
And focusing on the best setups possible.
That’s why today, I’ll be breaking down how my recent trade on Aytu BioPharma, Inc. (NASDAQ: AYTU) was my easiest trade of the week…
And show you how following this same thought process can help you spot trades just like this as early as tomorrow!
Having A Start Point
I’ve said this a million times already and I’ll say it again…
Everyone needs to focus on big percent gainers!
Early yesterday morning AYTU was an earnings winner…
And it was surging over 30%!
Whenever you spot a big percent gainer, typically over 20%, you need to ask yourself…
- Is it a short squeeze
- Is it news-related?
- Is it being pumped up by promoters?
Spotting a big percent gainer is only half the battle, but it puts you in a better position to start thinking about what your next steps should be.
Trading is all about figuring out a strategy that works best for you…
And for me, it’s the panic dip buy, which is why I look for big percent gainers every morning.
I tell all of my students who joined my challenge that they will need to figure out what works best for them…
And it’s the basic fundamentals that I teach them that will help them get to where they need to be.
Not every trader needs to trade the same way, but you need to understand the basics of trading if you want to succeed.
Yesterday I saw AYTU spiking from its earnings win…
The last thing I wanted to do was chase it, and that’s something most newbies like to do…
Instead, here’s what I did.
Knowing When To Enter A Trade
Nothing is ever an exact science when it comes to trading…
But there are tools you can use to help put you in a better position to know when to buy or sell.
Way too many newbies try to guess when to buy…
That’s like throwing a dart at a dartboard when you’re blindfolded and you’re hoping to hit a bullseye.
Sure, you may get lucky once in a while, but more often than not, you’ll miss and you’ll miss badly.
Every time I find a big percent gainer that may be worth trading, I need to dive into it a little bit more…
And I do that by looking at multiple charts.
Take a look at this monthly chart…
Source: StocksToTrade
Nothing fantastic about it, but look at where I drew that line…
That’s where AYTU broke out from a multi-month resistance level, which is going to play a key role in what I did next.
Once I noticed that, I decided to take a look at the daily chart…
At that time, I noticed on Level 2 that there was a wall of buyers at that key resistance level, making me feel more comfortable that I could get the bounce I was looking for.
Once I saw that, I was closely watching it minute-by-minute to see if it would hold above that key level.
And as it held for several minutes, volume started to increase and that’s when I decided to enter my trade.
Source: StocksToTrade
I bought AYTU at $2.36 and sold it at $2.63 for an 11.44% win! (Risked $8,260).
These are the types of plays you need to look for as a trader, and time and time again I see students just buy and hold…
And that’s why nearly 90% of traders fail.
When you’re looking to trade, you need to understand the big picture and focus on those basic fundamentals that matter…
More Breaking News
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Which will help you make a better overall decision every time you trade.
Just One Last Thing
Not every trade will react the same, that’s why you need to look to cut losses quickly if it doesn’t go as planned.
I always like to take the meat of the move and get out.
I don’t like to stay in any trade longer than I should because seconds and even minutes matter…
And if you held onto this trade longer than you should’ve, you can see it tanked shortly after I sold it, which would’ve wiped away all of my profits if I held on any longer.
One of the hardest things for traders to do is protect their earlier gains.
If you’re just starting off and want to learn more about this market, I recommend you join us for our FREE weekly trading session to get you started!
Stay safe everyone!
-Tim
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